The Economics of Joseph P. Kennedy, The Kennedy Family's Patriarch

John Tamny
, ContributorOpinions expressed by Forbes Contributors are their own.

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Regarding communism, it should be stressed yet again that Kennedy was intent on expanding his and his children's net worth such that he was very much against it. At the same time, he had what appears at least in retrospect a very reasoned opinion. What's impressive here is that Kennedy believed his rhetoric. Having made his money in the free markets (the notion that "inside information" could have enriched him or any investor in a major way vastly overrated), and having seen the comforts that came his way thanks to the profit motive, Kennedy knew that communism was doomed to fail.

Because Kennedy intuitively knew it would fail, he felt the U.S. should "back off and ‘permit communism to have its trial.'" Furthermore, he knew that people weren't demanding communism in the post-war world as much as they were "discontented, insecure and unsettled and they embrace anything that looks like it might be better than what they have to endure....It is very easy for anybody who has a job and is getting along all right to cry for democracy...but if you cannot feed your children and you do not know where the next meal is coming from, nobody knows what kind of freak you will follow." After that, Kennedy arguably saw very correctly that "Communism was neither monolithic nor eternal", that leaders like Mao and Tito would not long take orders from Stalin, so let the horror run its course rather than quixotically tax Americans heavily to merely contain that which will die on its own.

And then straight from the libertarian camp, Kennedy understood that small government wasn't consistent with a global military presence. As he put it, "To fight dictatorship, even in a ‘cold' war, democratic governments had to employ the tools of dictatorship." Though history says he was an idealistic appeaser, it's hard not to conclude with hindsight that Kennedy was a realist who'd lost loved ones to war, didn't want others to suffer as he did, and who knew like Ronald Reagan ultimately did that communism would die of its contradictions. The response to the latter is that Reagan built up the military to fight communism, but Kennedy himself wasn't against a strong military to protect the U.S.; rather he was against the global military presence that we became, and that brought with it a cruel body count in Korea, Vietnam, and now arguably, the Middle East.

Considering Kennedy's investments that made him one of the world's richest men, Nasaw notes that the patriarch "looked at the tax implications before investing in anything." Sorry Warren Buffett. And while some politicians believe that tax rates don't change behavior, Nasaw made it apparent that with the imposition of 91% income tax rates in the ‘50s that the ever clever Kennedy moved "large amounts of capital into oil and gas production to take advantage of generous depletion allowances and tax benefits." Though his stance on the gold standard was never made clear, post WWII Kennedy feared inflation, and with the latter in mind, his "spare capital" went "into real estate and oil, the soundest of investments in an inflationary economy." Worshippers of CPI to this day say there's no inflation to speak of, but screaming back at them is the fact that land and oil are once again popular investments amid a rising gold price....

About the work ethic that yielded such a grand fortune (by the '50s Fortune said he was worth $200-$400 million), Nasaw wrote that "those who had worked with him in the past marveled at the energy he expended, the impossibly long hours he kept, his ability to concentrate on several matters at once, and his capacity for juggling numbers, accounts, personalities, staffs, employees, and contracts as he flitted back and forth from office to office, city to city, coast to coast." Success is a choice when talented people work very hard. The successful don't owe us the fruits of their Herculean labor.

Joseph P. Kennedy was a remarkable man, and easily the greatest member of a family that historians will continue to analyze long after readers of David Nasaw's excellent book exit the earth. If there's a shame about the book, not to mention the life of a man marked by so much tragedy (he outlived 4 of his 9 children), it was the patriarch's view that since he'd made a fortune for his kids and future Kennedy generations, that they should, according to Nasaw, "devote themselves not to making money - he had done that for them - but to the greater good of the larger community." Total nonsense. The making of money is a near certain sign that an individual is doing something incredibly worthwhile. Kennedy earned lots of money, his life was very worthwhile as a result, and so is a read of Nasaw's highly interesting book.